EOG Resources Update - Nov 2

dan_s · Post by **dan_s** » Fri Nov 02, 2018 12:18 pm

I have updated my forecast/valuation for EOG's outstanding Q3 results and their updated guidance for Q4. EOG has not provided guidance for 2019 other than saying that their goal is annual production growth of 15% to 25%. I am assuming 18% production growth in 2019. They definitely have the cash flow to fund an aggressive growth program.

Based on my forecast, EOG will cover their 2018 $6 Billion capex program and have $2.2 Billion of free cash flow this year. Cash flow from operations in 2019 should be approximately $9.5 Billion. Their well results in the Delaware Basin continue to be "stunning".

I have raised my valuation by $3 to $158/share. This compares to First Call's Price Target of $142.17, which has not been updated since EOG published Q3 results.